Funds Flow

INTRODUCTION
In present days competitive environment the retailer is looking out for more value for
money. The challenge before the marketer is to identify what value would appeal and
convince the Retailer. The needs for fast changing and companies should opt to add
value for their Retailer by offering products or services just the way they want it .A
channel of distribution is a continues process which does not begin or end with
supply. It covers the entire ownership experience from selecting a product, to
purchase, to repeat supply.
When a Retailer has to choose from a large number of options, feature, pricing
structures, delivering methods, offering a unique product to every individual
customers will go a long way in adding value to the customer needs and wants, it is
important to recognize the various customers roles. Each role is concerned with a
different facet of the product. Retailers use some or all of these processes when they
make decision to opt a product. Opting decisions are sometimes made by place, time,
and surroundings. Retailers adopt three different roles in the decision making scenario
– supplier, sales executive and area wise supply. In each of these roles, retailer
constantly face choices- how much to spend, what product to acquire.
The value of medicines and Parma products for physical development and well being
of the people is now universally recognized.
A funds flow statement is a summary of a firm’s inflow and outflow of funds. It tells
us from where funds have come and where funds have gone. Funds flow statement
can indicate whether sourcing of funds and their use match in sense and also reveal
the prudence or otherwise of a firm’s financing and investment decision the financial
statement of business Indicates , liabilities of capital on a particular data and also the
profit or loss during a period. But it is possible that there is enough profit in the
business and the financial position is also good and still there may be deficiency of
cash or of working capital in business. If the management wants to find out as to
where the cash is being utilized, financial statement cannot help.
Therefore, a statement is prepared of the sources and applications of funds from

where it is utilized. This is called Funds Flow Statement. Funds Flow Statement is an
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analytical tool in hands of financial manager. The basic purpose of this statement is to
indicate on historical basis the changes in the working capital i.e., where funds came
from and where they are used during a given period. The fund flow statement or
statement of changes in financial position is a statement of flows. It measures the
changes that have taken place during two balance sheet dates.
According to R.N. Anthony, “Funds Flow is a statement prepared to indicate the

increase in cash resources and the utilization of such resources of a business during
the accounting period”.
Why we prepare funds flow statement?

The balance sheet and income statement are the traditional basic financial statement is
that they do not provide information regarding changes in the financial position
during a particular period of time. They fail to answer following questions
 What funds were available during the accounting period and for what purpose
these funds were utilized?
 Have long term sources been adequate to finance fixed assets purchase?
 Does firm possess adequate working capital?

 How much funds have been generated from operations?
 The balance sheet is merely a static statement of assets and liabilities of the
business as on particular date?
 The funds flow overcomes these limitations of basic financial statement funds
flow statement will provide us information about different sources of funds
and their various uses in particular date.
 Why did firm not pay dividend in spite of an adequate profit?
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NEED OF THE STUDY
Flow-of-funds statistics update capture balance sheet positions and all financial
transactions. According to their type and the economic sectors involved as purchasers
or issuers of financial assets. In the framework of the monetary analysis, the flow-of-
funds data providing in sign into various sectors Portfolio choice between money and
other financial assets and into their source of finance.
Funds flow statement guides the management in formulating the financial policies
such as dividend, reserves etc...
 A change in firms working capital positions,

 Change in firms cash flow,
 Change in the Firms total financial resources.
By this study we have to know about the Firms financial positions and it evaluate the
firms financing capacity.
It is the instrument for the allocation of resources and tools of communication to

outside world.
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OBJECTIVES OF THE STUDY
To the objectives of the study are as follows:
 To assess the present profitability and operation efficiency of SRI AMMIREDDY

AGENCIES and as well as for its different departments.
 To find out the relative importance of different components of the financial
position of the firm.
 To identify the reasons for change in profitability/financial positions of the firms.
 To assess the how efficiently the company is using its resource.
 To assess the working capital position of the company.
 To identify sources and uses of the funds of the company.
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METHODOLOGY OF THE STUDY
Required for this study would be collected through two sources i.e.
1. primary Data
The primary data comprises information obtained by the candidate during Discussions
with Heads of Departments and from the meeting with officials and staff.
2. Secondary Data
The secondary data has been collected from information through Annual Reports,
Public, Reports, Bulleting and other Printed Materials supplied by the Company.
In the present study 1/4th of the total information of time is from primary data and the
rest is from the secondary data.
 Collection of required data from annual records, internal published books or

profiles.
 Other books and journals and magazines
 Annual reports of the company
Data Analysis & Presentations Tools:

 Tables
 Bar charts
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LIMITATIONS OF THE STUDY
1. The study is mainly carried out based on the secondary data i.e., financial
statements of the company for last five years.
2. The study is mostly based on the secondary Data; which may involve certain
amount of bias .The Reasons drawn may not be accurate in certain cases.
3. Change in cash Are more important and relevant for financial Management
then the working capital.
4. Required data is not fully available during the completion of the project work.
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INTRODUCTION
The petroleum industry, also known as the oil industry or the oil patch, includes the
global processes of exploration, extraction, refining, transporting (often by oil
tankers and pipelines) and marketing of petroleum products. The largest volume
products of the industry are fuel oil and gasoline (petrol).Petroleum (oil) is also the
raw material for many chemical products,
including pharmaceuticals, solvents, fertilizers, pesticides, synthetic fragrances,
and plastics.
The industry is usually divided into three major components:
 Upstream
 Midstream
 and Downstream
Midstream operations are often included in the downstream category.
Petroleum is vital to many industries, and is of importance to the maintenance of

industrial civilization in its current configuration, and thus is a critical concern for
many nations. Oil accounts for a large percentage of the world’s energy consumption,
ranging from a low of 32% for Europe and Asia, to a high of 53% for the Middle East.
Other geographic regions' consumption patterns are as follows: South and Central
America (44%), Africa (41%), and North America (40%). The world consumes 30
billion barrels (4.8 km³) of oil per year, with developed nations being the largest
consumers. The United States consumed 25% of the oil produced in 2007. The
production, distribution, refining, and retailing of petroleum taken as a whole
represents the world's largest industry in terms of dollar value.
Governments such as the United States government provide a heavy public subsidy to
petroleum companies, with major tax breaks at virtually every stage of oil exploration
and extraction, including the costs of oil field leases and drilling equipment.
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Natural history
Petroleum is a naturally occurring liquid found in rock formations. It consists of a
complex mixture of hydrocarbons of various molecular weights, plus other organic
compounds. It is generally accepted that oil is formed mostly from the carbon rich
remains of ancient plankton after exposure to heat and pressure in Earth's crust over
hundreds of millions of years. Over time, the decayed residue was covered by layers
of mud and silt, sinking further down into Earth’s crust and preserved there between
hot and pressured layers, gradually transforming into oil reservoirs.
Early history
Petroleum in an unrefined state has been utilized by humans for over 5000 years. Oil
in general has been used since early human history to keep fires ablaze and in warfare.
Its importance to the world economy however, evolved slowly, with whale oil being
used for lighting in the 19th century and wood and coal used for heating and cooking
well into the 20th century. Even though the Industrial Revolution generated an
increasing need for energy, this was initially met mainly by coal, and from other
sources including whale oil. However, when it was discovered that kerosene could be
extracted from crude oil and used as a lighting and heating fuel, the demand for
petroleum increased greatly, and by the early twentieth century had become the most
valuable commodity traded on world markets.
Modern history
Imperial Russia produced 3,500 tons of oil in 1825 and doubled its output by mid-
century. After oil drilling began in what is now Azerbaijan in 1846 in Baku, two large
pipelines were built in the Russian Empire: the 833 km long pipeline to transport oil
from the Caspian to the Black Sea port of Batum (Baku-Batum pipeline), completed
in 1906, and the 162 km long pipeline to carry oil from Chechnya to the Caspian.
Batum is renamed to Batumi in 1936.
At the turn of the 20th century, Imperial Russia's output of oil, almost entirely from
the Apsheron Peninsula, accounted for half of the world's production and dominated
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international markets. Nearly 200 small refineries operated in the suburbs of Baku by
1884. As a side effect of these early developments, the Apsheron Peninsula emerged
as the world's "oldest legacy of oil pollution and environmental negligence." In 1846,
Baku the first ever well drilled with percussion tools to a depth of 21 meters for oil
exploration. In 1878, Ludvig Nobel and his Branobelcompany "revolutionized oil
transport" by commissioning the first oil tanker and launching it on the Caspian Sea.
Samuel Kier established America's first oil refinery in Pittsburgh on Seventh avenue
near Grant Street, in 1853. One of the first modern oil refineries were built by Ignacy
Łukasiewicz near Jasło (then in the dependent Kingdom of Galicia and
Lodomeria in Central European Galicia), Poland in 1854–56. These were initially
small, as demand for refined fuel was limited. The refined products were used in
artificial asphalt, machine oil and lubricants, in addition to Łukasiewicz's kerosene
lamp. As kerosene lamps gained popularity, the refining industry grew in the area.
The first commercial oil well in Canada became operational in 1858 at Oil Springs,
Ontario (then Canada West). Businessman James Miller Williams dug several wells
between 1855 and 1858 before discovering a rich reserve of oil four metres below
ground. Williams extracted 1.5 million litres of crude oil by 1860, refining much of it
into kerosene lamp oil. Some historians challenge Canada’s claim to North America’s
first oil field, arguing that Pennsylvania’s famous Drake Well was the continent’s
first. But there is evidence to support Williams, not least of which is that the Drake
well did not come into production until August 28, 1859. The controversial point
might be that Williams found oil above bedrock while Edwin Drake’s well located oil
within a bedrock reservoir. The discovery at Oil Springs touched off an oil boom
which brought hundreds of speculators and workers to the area. Canada's first gusher
(flowing well) erupted on January 16, 1862, when local oil man John Shaw struck oil
at 158 feet (48 m). For a week the oil gushed unchecked at levels reported as high as
3,000 barrels per day.
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The first modern oil drilling in the United States began in West Virginia and
Pennsylvania in the 1850s. Edwin Drake's 1859 well near Titusville, Pennsylvania, is
typically considered the first true modern oil well, and touched off a major boom. In
the first quarter of the 20th century, the United States overtook Russia as the world's
largest oil producer. By the 1920s, oil fields had been established in many countries
including Canada, Poland, Sweden, Ukraine, the United States, Peru and Venezuela.
The first successful oil tanker, the Zoroaster, was built in 1878 in Sweden, designed
by Ludvig Nobel. It operated from Baku to Astrakhan. A number of new tanker
designs were developed in the 1880s.
In the early 1930s the Texas Company developed the first mobile steel barges for
drilling in the brackish coastal areas of the Gulf of Mexico. In 1937 Pure Oil
Company (now part of Chevron Corporation) and its partner Superior Oil
Company (now part of ExxonMobil Corporation) used a fixed platform to develop a
field in 14 feet (4.3 m) of water, one mile (1.6 km) offshore of Calcasieu Parish,
Louisiana. In early 1947 Superior Oil erected a drilling/production oil platform in
20 ft (6.1 m) of water some 18 miles[vague] off Vermilion Parish, Louisiana. It
was Kerr-McGee Oil Industries (now Anadarko Petroleum Corporation), as operator
for partners Phillips Petroleum (ConocoPhillips) and Stanolind Oil & Gas (BP), that
completed its historic Ship Shoal Block 32 well in November 1947, months before
Superior actually drilled a discovery from their Vermilion platform farther offshore.
In any case, that made Kerr-McGee's Gulf of Mexico well, Kermac No. 16, the first
oil discovery drilled out of sight of land. Forty-four Gulf of Mexico exploratory wells
discovered 11 oil and natural gas fields by the end of 1949. During World War II
(1939-1945) - control of oil supply from Baku and Middle East played a huge role in
the events of the war and the ultimate victory of the allies. Cutting off the oil supply
considerably weakened Japan in the latter part of the war. After World War II ended,
the countries of the Middle East took the lead in oil production from the United
States. Important developments since World War II include deep-water drilling, the
introduction of the Drillship, and the growth of a global shipping network for
petroleum relying upon oil tankers and pipelines. In 1949, first offshore oil drilling at
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Oil Rocks (Neft Dashlari) in the Caspian Sea off Azerbaijan eventually resulted in a
city built on pylons. In the 1960s and 1970s, multi-governmental organizations of oil–
producing nations OPEC and OAPEC played a major role in setting petroleum prices
and policy. Oil spills and their cleanup have become an issue of increasing political,
environmental, and economic importance.
Industry structure
The American Petroleum Institute divides the petroleum industry into five sectors:
 Upstream (exploration, development and production of crude oil or natural gas)

 Downstream (oil tankers, refiners, retailers and consumers)
 Pipeline
 Marine
 Service and supply
Upstream
Oil companies used to be classified by sales as supermajors,
(BP, Chevron, ExxonMobil, ConocoPhillips, Shell, Eni and total S.A)
"majors", and "independents" or "jobbers". In recent years however, National Oil
Companies (NOC, as opposed to IOC, International Oil Companies) have come to
control the rights over the largest oil reserves; by this measure the top ten companies
all are NOC. The following table shows the ten largest national oil companies ranked
by reserves and by production in 2012.
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TOP 10 LARGEST WORLD OIL COMPANIES BY RESERVES AND PRODUCTION
RA COMPANY WORLDWIDE WORLDWIDE TOTAL COMPANY OUTPUT

NK (RESERVES) LIQID NATURAL RESERVES IN (PRODUCTION) (MILLIONS
RESERVES GAS OIL BBL/DAY)
(109 BBL) RESERVES EQUIVALENT
1012 ft3 BARRELS (109
BBL)
1 Saudi 260 254 303 Saudi 12.5
Aramco Aramco
2 NIOC 138 948 300 NIOC 6.4
3 Qatar 15 905 170 Exxonmobil 5.3
Petroleum
4 INOC 116 120 134 PetroChina 4.4
5 PDVSA 99 171 129 BP 4.1
6 ADNOC 92 199 126 Royal Dutch 3.9
Shell
7 Pemex 102 56 111 Pemex 3.6
8 NNPC 36 184 68 Chevron 3.5
9 NOC 41 50 50 Kuwait 3.2
Petroleum
Corporation
10 Sonatrach 12 159 39 ADNOC 2.9
Most upstream work in the oil field or on an oil well is contracted out to drilling
contractors and oil field service companies.
Aside from the NOCs which dominate the Upstream sector, there are many
international companies that have a market share. For example:
 BG Group
 BHP Billiton
 ConocoPhillips
 Chevron
 Eni
 ExxonMobil
 OMV
 Hess Ltd
 Marathon Oil
 Total
 Tullow Oil
 First Texas Energy Corp
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Midstream
Midstream operations are sometimes classified within the downstream sector, but
these operations compose a separate and discrete sector of the petroleum industry.
Midstream operations and processes include the following:
 Gathering: The gathering process employs narrow, low-pressure pipelines to

connect oil- and gas-producing wells to larger, long-haul pipelines or processing
facilities.
 Processing/refining: Processing and refining operations turn crude oil and gas
into marketable products. In the case of crude oil, these products include heating
oil, gasoline for use in vehicles, jet fuel, and diesel oil. Oil refining
processes include distillation, vacuum distillation, catalytic reforming, catalytic
cracking, alkylation, isomerization and hydrotreating. Natural gas
processing includes compression; glycol dehydration; amine treating; separating
the product into pipeline-quality natural gas and a stream of mixed natural gas
liquids; and fractionation, which separates the stream of mixed natural gas liquids
into its components. The fractionation process
yields ethane, propane, butane, isobutane, and natural gasoline.
 Transportation: Oil and gas are transported to processing facilities, and from
there to end users, by pipeline, tanker/barge, truck, and rail. Pipelines are the most
economical transportation method and are most suited to movement across longer
distances, for example, across continents. Tankers and barges are also employed
for long-distance, often international transport. Rail and truck can also be used for
longer distances but are most cost-effective for shorter routes.
 Storage: Midstream service providers provide storage facilities

at terminals throughout the oil and gas distribution systems. These facilities are
most often located near refining and processing facilities and are connected to
pipeline systems to facilitate shipment when product demand must be met. While
petroleum products are held in storage tanks, natural gas tends to be stored in
underground facilities, such as salt dome caverns and depleted reservoirs.
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 Technological applications: Midstream service providers apply technological
solutions to improve efficiency during midstream processes. Technology can be
used during compression of fuels to ease flow through pipelines; to better
detect leaks in pipelines; and to automate communications for better pipeline and
equipment monitoring.
While some upstream companies carry out certain midstream operations, the
midstream sector is dominated by a number of companies that specialize in these
services. Midstream companies include:
 Aux Sable
 Bridger Group
 DCP Midstream Partners
 Enbridge Energy Partners
 Enterprise Products Partners
 Genesis Energy
 Gibson Energy
 Inergy Midstream
 Kinder Morgan Energy Partners
 Oneok Partners
 Plains All American
 Sunoco Logistics
 Targa Midstream Services
 Trans Canada
 Williams Companies
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Environmental impact
Water pollution
Some petroleum industry operations have been responsible for water
pollution through by-products of refining and oil spills.
Air pollution
The industry is the largest industrial source of emissions of volatile organic
compounds (VOCs), a group of chemicals that contribute to the formation of ground-
level ozone(smog). The combustion of fossil fuels produces greenhouse gases and
other air pollutants as by-products. Pollutants include nitrogen oxides, sulphur
dioxide, volatile organic compounds and heavy metals.
Researchers have discovered that the petrochemical industry can produce ground-
level ozone pollution at higher amounts in winter than in summer.
Climate change
The greenhouse gases due to fossil fuels drive global warming. Already in 1959, at a
symposium organised by the American Petroleum Institute for the centennial of the
American oil industry, the physicist Edward Teller warned then of the danger of
global climate change. Edward Teller explained that carbon dioxide "in the
atmosphere causes a greenhouse effect" and that burning more fossil fuels could "melt
the icecap and submerge New York".
The Intergovernmental Panel on Climate Change, founded by the United Nations in

1988, concludes that human-sourced greenhouse gases are responsible for most of
the observed temperature increase since the middle of the twentieth century.
Future shortages
As petroleum is a non-renewable natural resource the industry is faced with an
inevitable eventual depletion of the world's oil supply. The BP Statistical Review of
World Energy 2007 listed the reserve/production ratio for proven resources
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worldwide. The study placed the ratio of proven reserves to production in the Middle
East at 79.5 years, Latin America at 41.2 years and North America at 12 years. A
simplistic interpretation of the ratio has led to many false predictions of immanent
"running out of oil" since the early years of the oil industry in the 1800s. This has
been especially true in the United States, where the ratio of proved reserves-to-
production has been between 8 years and 17 years since 1920. Many have mistakenly
interpreted the result as the number of years before the oil supply is exhausted. Such
analyses do not take into account future reserves growth.
The Hubbert peak theory, which introduced the concept of peak oil, questions the
sustainability of oil production. It suggests that after a peak in oil production rates, a
period of oil depletion will ensue. Since virtually all economic sectors rely heavily on
petroleum, peak oil could lead to a partial or complete failure of markets.
According to research by IBIS World, biofuels (primarily ethanol, but also biodiesel)
will continue to supplement petroleum. However output levels are low, and these
fuels will not displace local oil production. More than 90% of the ethanol used in the
US is blended with gasoline to produce a 10% ethanol mix, lifting the oxygen content
of the fuel.
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About SRI AMMIREDDY AGENCIES
SRI AMMIREDDY AGENCIES is exclusive petrol bunk for ESSAR ENERGY

situated at Ravulapalem.
Sales executives are playing important role in attaining the enquires of their
customers, the present enquiry a purchasing ratio of customer is 9:1.
Since SRI AMMIREDDY AGENCIES is the only big petrol bunk the promotional
activities conducted are not reaching effectively to customers of other talukas , it
show that most of their sales are in and around east godavari district covering some
areas of other talukas.
MAN POWER:
Manager - 1
Accountant - 1
Workers - 10
Staff - 2
INFRASTRUCTURE AVAILABLE IN PARTICULAR:
Cover Area12000 sq ft petrol bunk
Office Room 4500 Sq ft
No. Of office room Staff - 2
No. of petrol gun operators - 10
No of Mechanics - 2
No of Drivers - 2
No. of Supervisors – 2
DEPARTMENT PROFILE:
There are mainly three departments in SRI AMMIREDDY AGENCIES. They are
 Sales Department.
 Service Department.
 Accounts Department
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1. Sales Department: Mr. Rama rao heads Service Department and under his
guidance
2. Service Department: Mr. venkatesh heads Service Department and under his
guidance
3. Accounts Department: Mr. Narsi reddy heads Accounts Department and under his
guidance
VARIOUS FACILITIES AVAILABLE AT SRI AMMIREDDY

AGENCIES:
Good infrastructure qualified and trained manpower, good customer service with
safety awareness and innovative ideas were key elements in making SRI
AMMIREDDY AGENCIES successful dealership.
DISTRIBUTIONSHIIP PROFILE
Name of the Distribution ship SRI AMMIREDDY AGENCIES
Date of commissioning 2011
Name of the proprietor /partners M. RAMIREDDY
Customer holding More than 50,000
VALIDITY OF LICENSES
Explosive license P/SP/AP/14/5879(P55344)
Form-B 10/WG/OIL/2011
W&M stamping for all scales YES
INFRASTRUCTURE DETAILS
Delivery capacity with details 10000 LITRES
Availability of:
DEISEL 8000
PETROL 2000
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Essar Energy
Incorporated in 1989, Essar Oil Limited is a fully integrated oil company of
international scale with strong presence across the hydrocarbon value chain from
refining to oil retail. In August 2017, the company was acquired by international
investors Rosneft (a leader of Russia’s petroleum industry and the world’s largest
public oil and gas company by liquid hydrocarbon production and reserves) and an
investment consortium comprised of global commodity trading firm Trafigura and
UCP Investment Group.
Essar Oil owns India’s second largest single site refinery at Vadinar, Gujarat with a
current capacity of 20MMTPA. It is one of the world’s most modern and complex
refineries with a complexity of 11.8, which is amongst the highest globally. The
refinery is capable of processing some of the toughest crudes and yet produce high
quality Euro IV and V grade products. Essar Oil has become the fastest growing retail
business chain in India with the largest private sector fuel retail network. The
company has over 3,800 operational outlets spread across India and more than 2,000
outlets at various stages of completion.
Essar Energy Plc is an Indian-focused energy company with assets in the existing
power and oil and gas businesses. Headquartered in Port Louis, Mauritius and
subsidiary of Essar Group, the firm has interests in both the power
generation and petroleum industries. In May 2014 the company was acquired by its
majority shareholder.
OPERATIONS
OIL AND GAS
Essar Oil is a fully integrated oil & gas company of international scale with strong
presence across the hydrocarbon value chain from exploration & production to oil
retail.
POWER
Essar Energy has an installed power generation capacity of 3,910 MW across
six plants.
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Power plants
 Essar Hazira Power Plant, Hazira, Gujarat. It is a 515 MW (1x215, 1x300 MW)
gas-based thermal power plant. The plant is fully functional.
 Essar Vadinar Power Plant, Vadinar, Gujarat. It is a 1010 MW (1x120, 1x380
MW, 1x510 MW) captive thermal power plant. The plant is fully functional.
 Essar Bhander Power Plant, Hazira, Gujarat. It is a 500 MW (1x500 MW) gas-
based thermal power plant. The plant is fully functional.
 Essar Salaya Power Plant, Salaya, Gujarat. It is a 1200 MW (2x600 MW) coal-
based thermal power plant. The plant is fully functional.
 Essar Algoma Power Plant, Algoma, Ontario, Canada. It is a 85 MW (1x85 MW)
thermal power plant. The plant is fully functional.
 Essar Mahan Power Plant, Mahan, Singrauli district Madhya Pradesh. It is a 1200
MW (2x600 MW) coal-based thermal power plant. One unit is functional.
 Essar Hazira-2 Power Plant, Hazira, Gujarat. It is a 270 MW (1x135 MW)
thermal power plant. This plant is yet to become operational.
 Essar Tori Power Plant, Tori, Jharkhand. It is an 1800 MW (3x600 MW) coal-
based thermal power plant. This plant is yet to become operational.
 Essar Paradip Power Plant, Paradip, Odisha. It is a 120 MW (4x30 MW) coal-
based thermal power plant. This plant is yet to become operational.
Petroleum
The firm's oil and gas operations are carried out through its 86%-owned
subsidiary Essar Oil Limited, which is listed on the National Stock Exchange of
India and the Bombay Stock.
Essar Oil owns and operates “Essar Refinery a petroleum

refinery at Vadinar in Jamnagar district, Gujarat, It is India's second largest refinery,
which has a capacity of 18 million metric tons per annum.
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Essar Oil holds both onshore and offshore
petroleum exploration and production rights within India, as well as rights to
a coalbed methaneblock. The firm also holds exploration and production interests in
Nigeria, Vietnam, Australia, Indonesia, and Madagascar. Its total reserves amount to
2 Mbbl (320,000 m3) equivalent of 2P (proved plus probable) resources, 148 Mbbl
(23,500,000 m3) equivalent in contingent resources and 1,012 Mbbl (160,900,000 m3)
equivalent in prospective resources. In June 2012 Essar energy received the final
forest approval for developing a coal mine in Indonesia.
REFINING
Essar Oil’s Vadinar refinery in Gujarat started commercial production in May 1,

2008. Having completed its phase 1 expansion (March 2012) and optimisation (June
2012) projects, it is now India's second largest single - location refinery, with an
annual capacity of 20 mmtpa, or 405,000 barrels per day (bpd) up from 14.7 mmtpa/
300,000 bpd previously, and a complexity of 11.8, up from 6.1 previously. This puts
the Vadinar refinery amongst the world's most complex refineries. Vadinar refinery
can now process a heavier crude diet and yet produce higher value, high-quality
products, which will lead to increased refining margins.
Essar Oil, through a franchise model, today operates approximately 3,200+ operating
retail fuel outlets across India. Another 2,600+ are in various stages of
implementation. The company is now looking at expanding its retail network.
Additionally, the company is increasing non-fuel retailing activities in this portfolio of
retail outlets to provide an additional source of revenue.
RETAIL BUSINESS
Essar Oil is the first private company in India to enter the refined products marketing
sector.
The retail business unit of Essar Oil is oriented towards delivering better and faster
service to its customers. We pioneered the concept of setting up retail outlets using
the franchisee-owned, franchisee-operated model. With a pan-India network of
3,600+ retail stations, Essar reaches every corner of the country covering the national
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and state highways and the rural areas. Essar Oil supplies high-quality petrol and
high-speed diesel.
Our widespread network has created an excellent land bank resulting in the
development of Non-Fuel Retail (NFR). It is a promising business channel for our
retail today since it facilitates high footfalls, increased customer activation and high
recall value with a profitable utilization of the retail site.
All NFR activities are designed to serve the varying needs of our customers. This has
created some mutually beneficial alliances across various categories such as
Automobiles, Lubricants, Agrochemicals, Banking, Telecom and Food and
Beverages. These tie-ups with leading players such as Exide, SERVO, CASTROL,
TOTAL, ELF, J K Tyres, Bosch, SBI , Western Union Money Transfer, Amul, Café
Coffee Day, Heritage Foods, National Seeds Corporation have facilitated maximum
customer convenience and satisfaction.
Tie-ups with other oil marketing companies also gives Essar Oil access to product,
and the right to use their terminals and facilities for the placing and marketing our
products. Through this we have a presence at more than 30 supply locations across
India.
EOL has recently been aggressively adding multi-fuel options for its customers and
already has tie-ups with GSPC, GAIL GAS, Sabarmati Gas, Adani Gas and Gujarat
Gas Corporation for selling CNG, besides tie-ups with MGL and Aegis Logistics for
selling Auto LPG in its outlets. Currently, 29 of EOL’s retail outlets have CNG
facilities, and five have Auto LPG nozzles.
Today, we are slowly emerging as a one-stop destination for retail customers with
ever-changing needs.
We are also making a foray into retail and direct sales in Kenya and marketing all our
products to the SAARC countries.
21
Applications for petrol pumps
Essar Oil invites applications from interested people to set up petrol pumps across the
country. Interested people must possess land suitable for petrol pumps at prominent
locations. Essar Oil sees immense potential for growth in business for diesel and
petrol stations.
BULK BUSINESS
EOL offers a wide range of products to bulk customers (traders and direct customers)
in the industrial and transport sectors. A range of petroleum products covering
numerous applications are on offer to industrial customers like power plants, and
chemical, fertilizer and shipping companies. It has received approvals to supply
Aviation Turbine Fuel (ATF) to the Indian Armed Forces, and has tie-ups with oil
marketing companies, namely Bharat Petroleum Corporation Ltd (BPCL) and
Hindustan Petroleum Corporation Ltd (HPCL).
Bulk products currently offered by us:

Product Application
LPG Domestic fuel
SKO Domestic fuel
ATF Commercial airlines, defense services
Furnace Oil DG set, boiler, furnace, marine
Bitumen Grade VG30 Process, industrial
Petcoke Industrial fuel
Sulphur Chemicals industry
MS (BS II, BS III) Automotive fuel
HSD (BS II, BS III) Automotive fuel, industrial, DG set
22
THEORTICAL FRAME WORK
Funds flow statement is prepared to know the changes assets, liabilities and owners
equity between dates of two balance sheets. It is a statement of sources and uses of
Fund. Funds flow statement is also known as statement of sources and application of
funds or movement of funds statement etc...,
Funds flow statement reveals both inflow and outflow of funds. The inflow of funds is
known as sources of the funds and the outflow of funds means uses or applications of
the funds. In other words financial statement gives detailed analysis of changes in the
distribution of resources between two dates.
It is very useful tool in the financial Managers analytical kit. It provides a summary of
Management decisions of financing activities of the firm and investment policy. The
following are the advantages of funds flow statement.
1. Analysis of financial operations— The funds flow statement reveals the

net effect of various transactions of the operational and financial positions of the
business concern. It determines the financial consequences of business operations.
The statement discloses the causes for change in the assets and liabilities between
two different points of time. It highlights the effect of these changes on the
liquidity position of the company.
2. Financial policies—Funds flow statement guides the management in

formulating the financial policies such as dividend, reserve etc
3. Control device—It serves as a measure of control the management .if figures

are compared with budgeted/projected figures, management can take remedial
action if there are any Deviations.
4. Evaluation of firms Financing—Funds flow statement helps in evaluating

the firms financing. It shows the funds where they obtained from various sources
and used in the past. Based on this, the financial managers can take corrective
actions.
23
5. Acts as a future guide—Funds flow statement acts as a guide for future, to
the management. It helps the management to know various problems it is going to
face in near future for want of funds.
6. Appraising the use of working capital—Funds flow statement helps the

management in knowing how effectively the working capital put into use.
7. Reveals financial soundness—Funds flow statement reveals the financial

soundness of the business to the creditors, banks, financial institutions.
8. Changes in working capital—Funds flow statement highlights the changes

in working capital .this helps the management in framing its investment policy.
9. Assessing the degree of risk—Funds flow statement helps the bankers,

creditors, financial institutions in assessing the degree of risk involved in granting
the credit to the business concern.
10. Net results— This statement reveals the net results of Operations of during the
year in terms of cash.
National association of accountants (NAA)-i-National association of accountants

states the following uses of funds flow statements:
(a) Estimating the amount of funds needed for growth.

(b) Improving the rate of income on assets.
(c) Planning the temporary investment of idle funds.
(d) Securing additional working capital when needed.
(e) Securing economics in the centralized management of cash in organization
whose management is centralized.
(f) Planning the payment of dividend to share holders and interests to creditors.
(g) Easing the effects of an insufficient cash balance
24
Limitations of funds flow statement
The following are the important limitations of fund flow statement
1. Funds flow statement is not a substitute of income statement or a balance

sheet. It furnished only some additional information as regards changes in
working capital.
2. This statement lacks originality. It is a simply rearrangement of data appearing

in account books.
3. It indicates only the past changes. It can not reveal continuous changes.
4. When both the aspects of the transactions are not current, they are not
considered.
5. When both the aspects of the transaction are non- Current , Even then they are
not included in funds flow statements.
6. Some management accountants are of opinion that this statement is not ideal
tool for financial analysis.
7. Funds flow statement is historic in nature. Hence this projected funds flow
statement cannot be prepared with much accuracy.
Sources of Funds
1. Issues of share capital— If there is any increase in share capital it denotes

issue of additional shares during the period. Issue of shares is a source of funds as
it constitutes inflow of funds. Even calls received on partly paid shares constitute
inflow of funds. If share are issued at premium, the premium will also become a
source of funds.
Note- If shares are issued and allotted for other cash, considerations do not generate
fund.
25
2. Issue of debentures of long term loans – Issues of debentures, accepting
public deposits, and raising long term loans results in the flow of funds.
Note— If debentures like share have been allotted somebody other than cash,
consideration do not generate funds.
3. Sale of fixed assets or long term investments – When any fixed assets
like land, buildings, machinery, furniture on long term investments etc,. Are sold,
it generates funds and becomes a source of funds.
4. Non-trading income – Any non-trading receipts like dividends, rent, Interest

etc...
5. Decreasing in working capital – If working capital is decreased during the

accounting period, when compared with previous period, it denotes release of
funds from working capital and it constitutes a source of funds.
APPLICATION OR USE OF FUNDS
1. Redemption of preference share capital – If there is no any decrease in

preference share capital during current year, when compared with previous year,
we must assume that the preference shares are redeemed. It results in the outflow
of funds and is taken as application of funds.
2. Redemption of debentures –If any debentures are redeemed during the

account period, it constitutes applications of funds.
3. Repayment of long term loans – Repayment of long term loans also

constitutes an application of funds.
4. Purchase of fixed assets or long term investment – If any fixed assets

like land, buildings, furniture, long term investments etc., are purchased for cash,
fund outflow from the business.
26
5. Non-trading payment – Payment of dividends and tax etc., reduce the
working capital and is an application of funds. Declaration of dividend or creating
a provision for taxation, do not be treated as an outflow of funds.
6. Any other non trading payment – Any payment or expenses not related o
the trading operations of the business amounts to outflow of funds and also taken
as application of funds.
7. Funds lost in operations – If there is any loss during the accounting period,
it amounts to loss of funds in operation. Such loss of funds in trading operations
treated as outflow of funds.
Current and non current accounts:

To understand flow of funds, it is essential to classify various accounts and balance
sheet items into current and non-current categories.
Current accounts can either be current assets or liabilities. Current assets are those
assets that in the ordinary course of business can be or will be converted into cash
within a short period of one accounting year.
The following is the list of current or working capital accounts:
LIST OF CURRENT OR WORKING CAPITAL ACCOUTS

Current liabilities Current assets
1. Bills Payable 1. cash in hand
2. Sundry creditors or accounts 2. cash at bank
payable 3. Bills receivable
3. Accrued or outstanding expenses 4. Sundry debtors or accounts
4. Dividend payable receivable
5. Bank overdraft 5. Short-term loans and advances
6. Shorty-term loans advances & 6. Temporary or mark able
deposits investments
7. Provision against current assets 7. Inventories or stocks such a
(a) raw materials
(b) work in progress
(c) stores and spares
8. provisions for taxation (d) finished goods
9. Proposed dividend 8. prepaid expenses
(may be a current or non-current 9. accrued incomes
liability)
27
LIST OF NON-CURRENT OR PERMANENT CAPITAL ACCOUNTS
Non-current of permanent Current assets
1. Equity share capital 1. goodwill
2. Preference share capital 2. land
3. Redeemable preference share 3. building
capital 4. plant and machinery
4. Debentures 5. furniture and fittings
5. Long term loans 6. trade marks
6. Share premium account 7. patent rights
7. Share forfeited account 8. long-term investment
8. Profit and loss account (balance of
profit, i.e., credit balance) 9. debit balance of profit and loss
9. Capital reserve account
10. discount on issues of shares
10. Capital redemption 11. discount of issue of debentures
11. Capital redemption against fixed
assets 12. preliminary expenses other
12. Appropriate of profit. deferred expenses
(a) general reserve
(b) dividend equalization fund
(c) insurance
(d) compensation fund
(e) sinking fund
(f) investment fluctuation fund
(g) provisions for taxation
(h) proposed dividend
CASH FLOW STATEMENT
Meaning – Cash flow statement reveals the causes of the changes in cash position
of business concern between two dates of balance sheet. According to accounting
standards – 3 (revised) an enterprise should prepare a cash flow statement and should
present it for each period with financial statements prepared. As – 3 (revised) has also
given the meaning of the words cash, cash equivalent and cash flow.
Classification of cash flows

1. Cash flows from operating activities.
2. Cash flows from investing activities.
3. Cash flows from financing activities.
28
Difference between Funds flow and cash flow statement
The following are the difference between a Funds flow and a cash flow statement.
Funds flow statement Cash flow statement

1. Funds flow statement reveals the 1. Cash flow statement reveals the
change in working capital change in cash position between
between two balance sheet dates. two balance sheets.
2. Funds flow statement is based on 2. Cash flow statement is based on
Accounting. cash
3. In the case of funds flow Basis of accounting
statement a Schedule of 3. No such schedules of change in
changes in working capital is working is prepared for a cash
prepared. flow statement.
4. funds flow statement is useful in 4. cash flow statement as a tool of
planning, intermediate and long financing analysis is more useful
term financing for short term analysis and cash
5. Funds flow statement deals with panning
all components of working capital 5. cash flow statement deals only
6. Funds flow statement reveals the with cash and cash equivalents
sources and applications of funds. 6. Cash flow statement is prepared
The difference represents net by taking into consideration the
increase or decrease in working inflow and outflow in terms of
capital. operating, investing and financing
activities. The net difference
represents the net increase or
decrease in cash and cash
equivalents
29
DATA ANALYSIS & INTERPRETATION
1. STATEMENT OF CHANGES IN WORKING CAPITAL FOR THE
YEAR
2011 – 2012
Particula At the beginning of At the ending of Increase decreas
rs the year (2011) the year (2012) e
(a)current
assets 10,03,17
Stock 43,99,33,600,45 33,96,16,368,90 ,231.55
valuation
Cash in 14,36,20.04 12,33,655.25 1,02,549
hand 9,54,77,811.45 .79
6,60,61,741.68 16,15,39,5533.45
Other 50,74,31,547.17 50,23,89,577.28
current
assets
Total(a) 8,69,58,769.57 7,96,43,826.74 73,14,942.83
(b)current 7,24,30,638.34 5,59,48,836.41 1,64,81,801.93
liabilities 15,93,89,407.91 13,55,92,663.15
Creditors
Bills 34,80,42,139.26 36,67,96,914,13
payable
Total (1,87,54,774.87) 11,92,74,556.27 1,87,54,
liabilities 36,67,86,914.13 36, 67,86,914.13 774.97
(c)net
working
capital(a- 11,92,74
b) ,556.27
Increase in
working
capital
Total
COMPONENTS OF CURRENT ASSETS (%)

Particulars 2011 2012
Stock 86.69 67.60
Cash in hand 0.82 0.24
Other current assets 1.01 32.15
30
100
90
80
70
60
2011
50
2012
40
Series 3
30
20
10
0
stock Cash in hand Other current
assets
COMPONENTS OF CURRENT LIABILITIES IN (%)

Creditors 54.55 58.74
Bills payable 45.44 41.25
70
60
50
40 2011
2012
30
Column2
20
10
0
Creditors Bills payable
31
INTERPRETATION
Current assets like stock, cash in hand decreases to Rs. 10,03,17,231.55 Rs.
2,02,549.75 respectively other current assets had increases to Rs. 9,54,77,118.45.
Current liabilities had decreased to 2,37,96,744.76 and net working capital had
increased to Rs. 1,87,44,774.87.
32
2. FUNDS FLOW STATEMENT OF THE YEAR 2011-2012
1.Sources of funds Amount Rs 2.applicatio Amount Rs

n of funds
Profit from business 25,93,28,03 Redemption -
operations 2 of shares at
per(discount
/premium
Issue of share Redemption -

capital(discount/premium of
) debentures
issue of debentures(Dis / Payment of 20,68,19,90

prem) secured 8
loans
Increase unsecured loans 12,62,170
Sale of plant and 4,80,43,518

machinery Purchase of
fixed assets:
Sale of other fixed asset 14,75,99,36
2
Sale of computer
furniture 9,37,829 Purchase of 6,25,635
land
Other income receiving 57,06,962 8,34,01,996
Tax paid
Sale of buildings 20,75,865 95,46,263
Dividend
Sale of vehicle 3,18,804 paid 187,54,774
Increasing in
working
capital
Total 31,91,48,47 31,91,48,47

6 6
33
INTERPRETATION
The main source of fund is profit/income business from operations from this we get
the amount of Rs. 25,93.28,032 the main use of the fund is has been increased in
unsecured loans of Rs. 12,62,170 Lakhs and company sale of plant and machinery by
Rs. 4,80,43,518.
34
YEAR
2012-2013
Particulars At the At the ending Increase Decrease
beginning of of the year
the year(2012) (2013)
(a)current
assets
Stock valuation 33,96,16,363.90 29,67,18,765.16 4,28,97,603.74
Cash in hand 12,33,655.25 17,70,553.34 5,46,898.09
Other current 16,15,39,385.34 13,01,85,385.67 3,13,54,167.58

assets
Total (a) 5023,89,577.28 42,86,74,704.17
(b)current
liabilities
creditors 7,96,43,826.74 6,30,95,174.85 1,65,48,651.89
bills payable 5,59,48,836.41 5,52,88,115.24 6,60,721.17
total
13,55,92,663.15 11,83,83,290.09
liabilities (a)
(c) Net 36,67,96,914.13 31,02,91,414.08 5,65,05,500.05

working
capital (a-b)
Decrease in
working capital (5,65,05,500.05)
36,67,96,914.13 36,67,96,914.13 7,42,51,771.20 7,42,51,771.20

Total
35
Stock 67.60 69.22
80
70
60
50
40 2012
30 2013
Column1
20
10
0
Stock Cash in hand Other current
assets
COMPONENTS OF CURRENT LIABILITIES (%)

creditors 58.74 53.29
70
60
50
40 2012
30 2013
Series 3
20
10
0
creditors Bills payable
36
INTERPRETATION:
Current assets like Stock, other current assets decreased to Rs. 4,28,97,603.74 Rs.
5,46,898.09
Current liabilities had decreased to 1,72,09,373.06 and net capital had decreased
by 5,65,05,500.05.
37
4. FUNDS FLOW STATEMENT FOR THE YEAR
2012-2013
1.source of Amount Rs 2.applications of Amount Rs
funds per(discount/premium
Profit from 66,27,04,405 Redemption of shares at
business operations per(discount/premium)
Issue of share
capital at per Redemption of debentures
(dis/pre)
Issue of Payment of secured loans
debentures(dis/per) 46,95,32,851
Purchase of fixed assets:
Increased 7,58,62,000 11,90,967
unsecured loans
Sale of plant and 6,20,49,447

machinery
Purchase of building
Sale of other fixed 5,75,297 8,42,84,650
assets Purchase of land
Sale of computer 68,736 26,66,37,172
furniture Investment
Other income 4,90,55,806 13,67,64

receiving Taxes paid
Decrease in 5,65,05,500 8,50,38,787

working capital Dividend paid
Total 90,68,21,191 90,68,21,191
INTREPETATION
The main source of funds is profit/income from business operations from this we get
the amount of Rs. 66,27,04,405 the main use of the funds is for payment of security
loans by Rs. 46,95,32,851 . there has been increased in unsecured loans of Rs.
7,58,62,000 lakhs and company sale of plant and machinery by Rs. 6,20,49,447.
38
YEAR
2013-2014
Particulars At the At the end of Increase Decrease
Beginning of the year
the (2014)
year(2013)
(a)current
assets
Stock
valuation 29,67,18,769.16 23,66,36,182.10 6,00,82,583.06
Cash in hand 11,70,553.34 3,06,463.46 14,64,089.86
Other current
assets 13,01,85,385.67 11,56,00,293.06 1,45,85,092.61
Total(a)
42,86,74,704.17 35,25,42,938.62
Creditors 6,30,95,174.85 6,46,37,582.16 18,42,407.31
Bill payble 5,52,88,115.24 5,53,20,684.07 18,67,431.17
Total 11,83,83,290.09 11,83,58,266.23
liabilities
(c)net
working
capital(a-b) 31,02,91,414.08 23,41,84,672.39 7,61,06,741.69
(7,61,06,741.69)
Decrease in
working
capital
Total 31,02,91,414.08 31,02,91,414.08 7,79,74,171.86 7,79,74,171.86

stock 69.14 67.12
current assets 30.45 32.79
39
80
70
60
50
40 2013
2014
30
Column1
20
10
0
stock Cash in hand current assets

60
50
40
Particulars
30 2013
2014
20
10
40
INTERPRETATION:
Current assets like stock, cash in hand and other current assets had decreased to Rs.
7,61,31,765.55. current liabilities had decreased to Rs. 25,023.86 therefore the net
working capital had decreased to Rs. 7,61,06,741.69.
41
6. FUNDS FLOW STATEMENT FOR THE YEAR 2013-2014
1.Sources of Amount Rs 2.applications of Amount Rs

funds funds
Profit from 81,65,46,026 Payment of secured 1,49,42,845
business loans
Purchase of fixed
Issue of share assets:
capital at
per(dis/pre)
6,70,296 Purchase of 2,67,80,144
Sale of fixed buildings
assets(dis/pre) 2,65,58,190 1,68,32,770
Purchase of land
Other income
receiving 7,61,06,741 39,03,47,935
purchase of land
Decrease in and machinery
working capital 2,57,866,214
Computer and
furniture value
4,87,82,772
Internal dividend
paid
21,22,85,77
Taxes paid
17,27,16,305
Dividend paid
Total 91,98,81,253 91,98,81,253
INTERPRETATION:
The main source of the fund is to provide/income business operations from this we get
the amount of Rs. 81,64,46,026, the main use of the fund has been payment of in
secured loans of Rs. 1,49,42,845,lakhs and company sale of other fixed assets by Rs.
6,70,296.
42
YEAR
2014-2015
Particular At the At the Increase Decrease
s beginning of ending of
the year the
(2014) year(2015)
(a)current
assets
23,66,36,182.1 33,86,14,047.1 10,19,77,865.0
Stock
0 1 1
valuation
3,06,463.46 6,74,773.47 3,68,310.01
Cash in hand
30,15,382.74
Other current
11,56,00,293.0 11,25,84,910.3
assets
6 2
------------------- -------------------
Total
- -
35,25,42,938.6
2 45,18,73,730.9
(b)current 0
liabilities
1,00,15,036.22
Creditors
6,80,37,258.01
Bills payable
6,49,37,582.16
Total 7,49,52,618.38
liabilities 5,34,20,684.07
------------------- 12,14,57,94.08
(c)net 11,83,58,266.2 ------------------- 2,12,78,498.05
working 8 19,64,1,560.46
capital(a-b)
Increasing in
working 23,41,84,672.3 25,54,63,170.4
capital 9 4
(2,12,78,498.05
)
Total 25,54,63,170.4 25,54,63,170.4 10,23,46,176.0 10,23,46,176.0
4 4 0 0
43
COMPONENTS OF CURRENT ASSET (%)
Stock 67.12 74.94
80
70
60
50
Particulars
40 2014
30 2015
20
10

44
70
60
50
40 Particulars
2014
30 2015
20
10
INTERPRETATION:
Other current asset had decreased to Rs. 30,15,382.84 during the year 2014-2015.
Current assets like stock had increased to Rs. 10,19,77,865.01 and cash on hand to Rs.
3,688,310.01.
Current liabilities had increase to Rs. 7,80,52,294.23 and net working capital had
increased by Rs. 2,12,78,498.05.
45
8. FUNDS FLOW STATEMENT FOR THE YEAR 2014-2015
1.source of Amount Rs 2.application of Amount Rs

funds funds
Profit from 28,79,55,762 Redemption of
business shares at
operations per(dis/pre)
14,52,09,679 Payment of secured 25,08,11,680

Increase unsecured loans
loans
11,15,23,683 Purchase of fixed
Sale of plant and assets:
machinery
6,21,44,260 Purchase of 4,54,66,941
Sale of other fixed building
assets
50,37,670 21,58,66,941
Sale of computer Taxes paid
furniture
- 8,66,92,800
Other incomes Dividend paid
receiving
-
Sale buildings Increasing in 2,12,78,498
82,45,806 working capital
Sale of vehicle
Total 620,116,860 620,116,860
INTERPRETATION:
The main source of fund is profit /income business operations from this we get the
amount of Rs. 28,79,55,762th main use of the funds is has been increased in
unsecured loans of Rs. 14,52,09,679.lakhs and company sale of plant and machinery
by Rs. 11,15,23,683.
46
YEAR
2015-2016
Particular At the At the increase decrease
s beginning of ending of
the year the year
(2015) (2016)
(a)current
assets
Stock 33,86,14,047.11 30,08,73,792.6 3,77,40,854.43

valuation 8
6,5,74,773,47 13,30,558,06
Cash in hand 20,05,331,53
Other 11,25,84,910,32 2,96,04,599,99

current 14,21,89,510,3
assets 45,18,73,730,9 1
total 44,50,68,034,5
2
(b)current
Liabilities 7,49,52,618,38 59,44,090,77
Creditors 12,14,57,942,08 8,46,35,469.07
6,90,08,527,61
Bills payable 19,64,10,560,.4
6 3,68,22,473.01
total
liabilities 10,58,31,000.6
2 8,37,74,463.48
(c)net 25,54,63,170.44
working
capital(a-b)
33,92,37,633.9
(8,37,74,463.48 2
Increase in
)
working
capital
Total 33,92,37,633.92 33,92,37,633.9 12,15,14,717.9 12,15,14,717.9
2 2 2
47
Stock 74.94 67.59
80
70
60
50
Particulars
40 2015
2016
30
20
10

48
70
60
50
40 Particulars
2015
30 2016
20
10
INTERPRETATION
Current assets like stock had decreased to Rs. 3,77,40,854.43 during the year 2015-
2016. Other current assets like cash in hand, other current assets had increased to Rs.
13,3o,558.06 , Rs. 2,96,04599.99.
Current liabilities had decreased to Rs. 9,05,79,560.84 and net working capital had
increased to Rs. 8,37,74,463.48.
49
10.FUNDS FLOW STATEMENT FOR THE YEAR
2015-2016
1.sourcs of Amount Rs 2.applications of Amount Rs
funds funds
Profits from 39,60,65,345
business Operations Payment of secured
loans 16,99,84,030
Issue of share
capital at per (
Discount/premi purchase of fixed
um) assets
6,64,72,980
Increasing
unsecured loans purchase of
9,06,09,764 buildings 6,64,72,980
Sale of plant and
machinery purchase of land
7,29,38,883 9,00,00,100
Sale of fixed asset
taxes paid
Sale of vehicls 3,40,34.660 14,58,65,545
Increasing working
61,45,898 capital 8,37,74,463
Dividend paid
4,36,97,432
Total 59,97,94,550 59,97,94,550
INTERPRETATION:
The main source of fund is profit/income business operations 39,60,65,345 from this
we get the amount of Rs. 16,99,84,030 main use of the funds is has been increased in
unsecured loans of Rs. 9,06,09,764lakhs and company sale of plant and machinery by
Rs. 7,29 ,38,883.
The change in working capital is gradually increased from 2011-2012 to 2013-2014

and it is decreased in 2014-2015. Again increased in 2015-2016. Current assets has
decreased every year from 2011-2014 and 2015-2016 and is increased in 2014-2015
similarly current liabilities are also decreased from 2011-2012 to 2014 and increased
in 2015-2016.
50
FINDINGS
The company liquidity position is not satisfactory.
 The company working capital is fluctuating, because of decreased current

assets and increased current liabilities.
 The company Profile has been increasing for last five years, but still the rate
of increase is less.
 The company spent its funds for purchasing of fixed assets.
 The current liabilities had been decreased from 2011 to 2014. But in 2014-
2015 the current liabilities were increased.
 The current assets were decreased for last 4 years. But in 2014-2015 the
current has been increased.
 The Current Assets has been decreased & the current Liabilities Has been
decreased every year.
 The company borrowings are increased every year.
 The company sales are increased every year.
 The company reserves and surplus are also increasing in every year.
 During the period of 2011-2016 the sources and applications funds are
fluctuating
 Borrowings are one of the major sources for fund risings, the sizes of
borrowings are continuously increasing during the Period.
51
SUGGESTIONS
 The liquidity of the company indicates the flexibility in maintaining cash

balance the company liquidity position is not satisfactory right now. It has o
concentrate more on increasing its current assets as well as decreasing its
current liabilities.
 The increased profit of a company show huge financial positions of the

company. But the rate of increase is less per every year, the company should
frame a better financial positions so that the rate of increase of profits could be
more.
 It is observed that investment in fixed assets is not a co related to the activity

of the company. That means the company assets are under Utilized. Therefore
the company should make the use of its assets fully.
 The company is consistently facing increasing losses therefore there is every

danger of net work being eroded which is a dangers sign.
 To reduce the losses of the organization take the efficient financial policies.
 The company can give short term loans to other companies, so that the
company can make additional profits.
 Cash balance is not maintained properly, so they should maintain it properly to

meet day to day operations without fail.
52
CONCLUSION
The project deals with the preparation of funds flow statement in SRI AMMIREDDY
AGENCIES, Ravulapalem, East Godavari district for preparing the funds flow
statement. I have prepared the statements of changes in working capital by
considering the current liabilities and current assets of the company.
At last I prepared the funds flow statement to know the sources from where the firm
got it funds and the applications of funds to know, how the firm had spent or invested
in the funds.
The main increase of current liabilities is payment of tax on dividends declared by the
company. Even though the liabilities and the current liabilities increased t is
appreciable that the company had paid good dividends to its holders and satisfied
them. The company thus achieved the goal of wealth maximization of now a days .
The flow of funds in the organization is mainly outflow due to the dividend declared
and the tax paid there on. The company also acquired funds by borrowing from the
banks also.
53
ANNEXURE
Balance sheet – ESSAR ENERGY Rs( in crore)

Particulars Mar’16 Mar’15 Mar’14 Mar’13 Mar’12
Liabilities 12 12 12 12 12
Months Months Months Months Months
Shahsre capital 1148.00 574.00 286.00 287.00 287.00
Reserves and 56009.00 47494.00 41806.00 35772.00 29470.00
surplus
Net worth 57157.00 48068.00 42092.00 36059.00 29757.00
Secured loans .00 .00 .00 .00 .00
Unsecured loans .00 .00 .00 .00 .00
Total liabilities 57157.00 48068.00 42092.00 36059.00 2757.009
Assets
Gross block 14709.00 12827.00 10374.008 8029.00 4061.00
(-) acc. 6461.00 5480.00 4642.00 3576.00 .00
depreciation
Net block 8248.00 7347.00 5732.00 4453.00 4061.00
Capital work in 934.00 769.00 954.00 1135.00 588.00
progress
investments 11113.00 6857.00 6717.00 4344.00 1409.00
inventories .00 .00 .00 .00 .00
Sundry debtors 9798.00 8627.00 7336.00 6365.00 5404.00
Cash and bank 29176.00 27722.00 24100.00 20401.00 18057
98.00.00
Loans and 13498.00 10491.00 7873.00 6330.00 6296.00
advances
Total current 52472.00 46840.00 39309.00 33096.00 29757.00
assets
Current liabilities 6801.00 5700.00 4503.00 3181.00 2454.00
provisions 8809.00 8045.00 6117.00 3788.00 3604.0
Total current 15610.00 13745.00 10620.00 6969.00 6058.00
liabilities
Net current assets 36862.00 33095.00 28689.00 26127.00 23699.00
Misc. expenses .00 .00 .00 .00 .OO
Total 57157.00 48068.00 42092.00 36059.00 29757.00
assets(A+B+C+D)
54
BIBLIOGRAPHY
The regarding listed here are supplementary in nature and had proved to be helpful
and learning and completion of my project.
1. PRASANA CHANDRA, “Financial Management”, 7th Edition, published by

TATAMCGRAW-Hill.
2. S.N.MAHESHWARY, “Financial Account”, 4th Edition, Published by VIKAS

publisher house PVT Ltd.
3. KHAN&JAIN, “financial management” 5th Edition, published by Tata MCGRAW

–Hill.
4. SUDHINDRA BHAT “financial management” 2nd Edition, published by Anurag

singh.
5. S.P.JAIN, K.L. NARANG, “financial accounting” 5th Edition published by

KALYANI Publishers.
JOURNALS:
 Economic times
 India Today
 Times of India
 Company Journals
WEBSITES:
www.essar.com
www.wikipedia.com
55

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INTRODUCTION

Therefore, a statement is prepared of the sources and applications of funds from

According to R.N. Anthony, “Funds Flow is a statement prepared to indicate the

Why we prepare funds flow statement?

 Does firm possess adequate working capital?

 Why did firm not pay dividend in spite of an adequate profit?

 A change in firms working capital positions,

It is the instrument for the allocation of resources and tools of communication to

 To assess the present profitability and operation efficiency of SRI AMMIREDDY

 Collection of required data from annual records, internal published books or

Data Analysis & Presentations Tools:

The industry is usually divided into three major components:

Midstream operations are often included in the downstream category.

Petroleum is vital to many industries, and is of importance to the maintenance of

 Upstream (exploration, development and production of crude oil or natural gas)

RA COMPANY WORLDWIDE WORLDWIDE TOTAL COMPANY OUTPUT

 Gathering: The gathering process employs narrow, low-pressure pipelines to

 Storage: Midstream service providers provide storage facilities

The Intergovernmental Panel on Climate Change, founded by the United Nations in

SRI AMMIREDDY AGENCIES is exclusive petrol bunk for ESSAR ENERGY

VARIOUS FACILITIES AVAILABLE AT SRI AMMIREDDY

OIL AND GAS

Essar Oil owns and operates “Essar Refinery a petroleum

Essar Oil’s Vadinar refinery in Gujarat started commercial production in May 1,

Bulk products currently offered by us:

1. Analysis of financial operations— The funds flow statement reveals the

2. Financial policies—Funds flow statement guides the management in

3. Control device—It serves as a measure of control the management .if figures

4. Evaluation of firms Financing—Funds flow statement helps in evaluating

6. Appraising the use of working capital—Funds flow statement helps the

7. Reveals financial soundness—Funds flow statement reveals the financial

8. Changes in working capital—Funds flow statement highlights the changes

9. Assessing the degree of risk—Funds flow statement helps the bankers,

National association of accountants (NAA)-i-National association of accountants

(a) Estimating the amount of funds needed for growth.

1. Funds flow statement is not a substitute of income statement or a balance

2. This statement lacks originality. It is a simply rearrangement of data appearing

1. Issues of share capital— If there is any increase in share capital it denotes

4. Non-trading income – Any non-trading receipts like dividends, rent, Interest

5. Decreasing in working capital – If working capital is decreased during the

APPLICATION OR USE OF FUNDS

1. Redemption of preference share capital – If there is no any decrease in

2. Redemption of debentures –If any debentures are redeemed during the

3. Repayment of long term loans – Repayment of long term loans also

4. Purchase of fixed assets or long term investment – If any fixed assets

Current and non current accounts:

The following is the list of current or working capital accounts:

LIST OF CURRENT OR WORKING CAPITAL ACCOUTS

CASH FLOW STATEMENT

Classification of cash flows

Funds flow statement Cash flow statement

COMPONENTS OF CURRENT ASSETS (%)

COMPONENTS OF CURRENT LIABILITIES IN (%)

1.Sources of funds Amount Rs 2.applicatio Amount Rs

Issue of share Redemption -

issue of debentures(Dis / Payment of 20,68,19,90

Sale of plant and 4,80,43,518

Total 31,91,48,47 31,91,48,47

Stock valuation 33,96,16,363.90 29,67,18,765.16 4,28,97,603.74

Cash in hand 12,33,655.25 17,70,553.34 5,46,898.09

Other current 16,15,39,385.34 13,01,85,385.67 3,13,54,167.58

Total (a) 5023,89,577.28 42,86,74,704.17

creditors 7,96,43,826.74 6,30,95,174.85 1,65,48,651.89